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President Erdogan of Turkey has lost touch with economic reality, retreating into conspiracy theoriesCredit:
i24 news

The famous Lex Dornbusch of financial crises is that they take longer to hit than you think, but then unfold much faster than you ever thought possible.

Every hedge fund in Mayfair knew that Turkey was an accident waiting to happen. It was odds-on favourite to be the first of the big emerging market economies – along with Argentina – to face trouble as the US Federal Reserve raised interest rates and drained the pool of global dollar liquidity.

The foreign currency debt of Turkish companies, banks, and the state had reached 55pc of GDP, roughly the danger threshold in the Asian crisis of 1998. The country had become dangerously reliant on short-term dollar loans to cover a current account deficit...